Elasticity2measure of how much buyers and sellers respond to changes in market conditions. measures how responsive Qd or Qs is to changes in price, income or prices of related goods.

Elasticity of Demand3Price elasticity of demand, Ep: measures how much the quantity demanded of a good responds to a change in the price of that good.Ep = percentage change in Qd percentage change in P= % rin Qd(new – old)%r in P old

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